US to Take Over AIG in $85 Billion Bailout

Governor Paterson says the federal government's bailout of insurance giant AIG will help stave off a fiscal crisis for New York state. WNYC's Isaac-Davy Aronson reports.

REPORTER: Governor Paterson and his superintendent of insurance, Eric Dinallo, had lobbied hard for the Fed to step in, with Paterson making the rounds of news outlets yesterday to warn that the ripple effects from an AIG bankruptcy could impact scores of ordinary Americans.

At a news conference just after the deal was struck last night, the governor said he was proud that the state's earlier offer to help AIG borrow $20 billion from its subsidiaries bought time for the larger deal, and said that wouldn't be the end of the state's involvement.

PATERSON: New York will continue to play a decision-making and supervisory role in the disbursement of AIG's businesses, and superintendent Dinallo will play a very strong leadership role in the protection of New York State's policy holders.

REPORTER: The Governor said the latest financial turmoil has probably erased the financial "cushion" created through budget cuts at last month's special legislative session, and thanked legislative leaders for offering to return to Albany for another. For WNYC, I'm Isaac-Davy Aronson.